The search engine space is no stranger to rumors and they do often turn out to be reality. On that basis, we’re reporting TechCrunch’s rumor that Google may be in talks to acquire YouTube for $1.6 billion.
Michael Arrington explains…
I got an email tonight about a possible Google acquisition of YouTube that may be in the final stages before closing. Rumored price is $1.6 billion. A quick phone call to a VC confirmed that the rumor is circulating (he also confirmed the price), but that is far from confirmation that this deal is happening. Iâ€™m digging for more but the source on this one is very good.
If this happens, it will be interesting to see what Google does with Google Video – will it keep that brand or the more popular YouTube one.
I’m also a little doubtful as to whether it makes sense for Google to acquire YouTube, when it has already developed its own video service. Yahoo acquired del.icio.us when it had its own offering and I’ve not really seen that fuel much more growth.
Acquisitions in this industry tend to make sense, when the larger company is able to enter a new space via the acquiree. When the acquiring company already has a similar service, it makes less sense. Then again, Google has the money, so why not take away one of their major competitors, by acquiring them.